SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-Q

Transcription

1 SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-Q QUARTERLY REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SRC RULE 17(2)(b) THEREUNDER 1. For the quarterly period ended March 31, Commission identification number BIR Tax Identification No Exact name of issuer as specified in its charter Melco Crown (Philippines) Resorts Corporation 5. Province, country or other jurisdiction of incorporation or organization Philippines 6. Industry Classification Code: (SEC Use Only) Address of issuer's principal office Postal Code Asean Avenue cor. Roxas Boulevard, Brgy. Tambo 1701 Parañaque City 8. Issuer's telephone number, including area code (02) Former name, former address and former fiscal year, if changed since last report N.A. 10.Securities registered pursuant to Sections 8 and 12 of the Code, or Sections 4 and 8 of the RSA Title of each Class Number of shares of common stock outstanding and amount of debt outstanding as of March 31, 2017 Common 5,662,897,278 Outstanding Debt: 15 billion Senior Note 11. Are any or all of the securities listed on a Stock Exchange? Yes [X] No [ ] If yes, state the name of such Stock Exchange and the class/es of securities listed therein: Philippine Stock Exchange Common 1

2 12. Indicate by check mark whether the registrant: (a) has filed all reports required to be filed by Section 17 of the Code and SRC Rule 17 thereunder or Sections 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of the Corporation Code of the Philippines, during the preceding twelve (12) months (or for such shorter period the registrant was required to file such reports) Yes [X] No [ ] (b) has been subject to such filing requirements for the past ninety (90) days. Yes [X] No [ ] 2

3 TABLE OF CONTENTS Page No. PART I FINANCIAL INFORMATION Item 1 Financial Statements 4 Item 2 Management s Discussion and Analysis of Financial Condition and Results of Operations 4 PART II OTHER INFORMATION 16 SIGNATURES 17 Condensed Consolidated Financial Statements as of March 31, 2017 (Unaudited) Appendix I 3

4 PART I - FINANCIAL INFORMATION Item 1. Financial Statements The unaudited condensed consolidated financial statements as of March 31, 2017 and for the three months ended March 31, 2017 and the audited consolidated balance sheet as of December 31, 2016 and the related notes to the unaudited condensed consolidated financial statements of Melco Crown (Philippines) Resorts Corporation (the Company or MCP ) and its subsidiaries (collectively, the Group or we ) are filed as part of this Form 17-Q as Appendix I. There are no other material events subsequent to the end of this interim period that have not been reflected in the unaudited condensed consolidated financial statements filed as part of this report. Review of Unaudited Interim Financial Information The Group s unaudited condensed consolidated financial statements have been reviewed and approved by the Company s Audit and Risk Committee and reviewed by the Group s external auditors in accordance with Philippine Standard on Review Engagements ( PSRE ) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing and Assurance Standards Council of the Philippines. The Group s unaudited condensed consolidated financial statements are included as part of this Form 17-Q, which have been reviewed and approved by the Company s Board of Directors. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following management s discussion and analysis relates to the consolidated financial information and operating results of the Group and should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes of the Group as of March 31, 2017 and for the three months ended March 31, Overview and Plan of Operation The Company, through its subsidiaries, is engaged in the development and operation of City of Dreams Manila, an integrated hotel, gaming, retail and entertainment complex within the Entertainment City. The Company s subsidiaries, MCE Holdings (Philippines) Corporation ( MCE Holdings ), MCE Holdings No. 2 (Philippines) Corporation ( MCE Holdings No. 2 ), and MCE Leisure (Philippines) Corporation ( MCE Leisure ) (MCE Holdings, MCE Holdings No. 2 and MCE Leisure are collectively referred to as the MCE Holdings Group ), together with SM Investments Corporation ( SMIC ), Belle Corporation ( Belle ) and PremiumLeisure and Amusement, Inc. ( PLAI ) (SMIC, Belle and PLAI are collectively referred to as the Philippine Parties ) (MCE Holdings Group and the Philippine Parties are collectively referred to as the Licensees ), are the holders of the regular license issued by the Philippine Amusement and Gaming Corporation ( PAGCOR ) for the development of City of Dreams Manila (the Regular License ). The Company is an indirect subsidiary of Melco Resorts & Entertainment Limited ( Melco ), a leading developer of integrated gaming resorts in Macau and other parts of Asia with its American Depositary Shares traded on the NASDAQ Global Select Market in the United States of America. The Group, through MCE Leisure, is responsible for the management and operation of City of Dreams Manila and its fit-out, including furniture, fixtures and equipment (including gaming equipment), as well as working capital expenses, nonreal property improvements and personal property. Belle was responsible for provision of the land and building structures of City of Dreams Manila, including maintenance of the land where City of Dreams Manila is located. Prior to May 2016, the ultimate holding company of MCP was Melco. Melco, in turn, was majority held by Melco International Development Limited ( Melco International ), a Hong Kong-listed company, and Crown Resorts Limited ( Crown ), an Australian-listed corporation through their respective subsidiaries. In May 2016, as a result of the completion of the shares repurchase by Melco from Crown, followed by cancellation of such shares and with certain changes in the composition of the board of directors of Melco, 4

5 Melco International became Melco s single largest shareholder and the Company's ultimate holding company. 1 On February 1, 2017, the Board of Directors of the Company approved the change of the Company s name to Melco Resorts and Entertainment (Philippines) Corporation (such change was also approved by our stockholders at the Special Stockholders Meeting on April 7, 2017), subject to the approval of the Securities and Exchange Commission ( SEC ). City of Dreams Manila had its grand opening on February 2, This new integrated casino resort at Entertainment City, Manila Bay, Manila, is solely operated and managed by MCE Leisure. The dynamic and innovative resort complex, located on an approximately 6.2 hectare site at the gateway to Entertainment City, includes entertainment, hotel, retail and dining and lifestyle experiences with aggregated gaming space, including VIP and mass market gaming facilities with up to approximately 380 gaming tables, 1,700 slot machines and 1,700 electronic table games. As of March 31, 2017, City of Dreams Manila has around 268 gaming tables, 1,625 slot machines and 158 electronic table games in operation. The integrated resort features three distinctive entertainment venues, namely, DreamPlay by DreamWorks, Manila s first branded Family Entertainment Center; Centerplay, a live performance central lounge inside the casino; and nightclubs Chaos and Pangaea Ultra-Lounge (a night club that has active gaming tables), both situated within the Fortune Egg, an architecturally-unique dome-like structure, which is accented with a creative exterior lighting design. It is expected to become an iconic landmark of the Manila Bay area. City of Dreams Manila also includes an approximately 260 room Crown Towers hotel, Hyatt City of Dreams Manila, a 365 room hotel managed by Hyatt International Corporation ( Hyatt ), and Asia s first Nobu Hotel with 321 rooms. The Crown Towers hotel at City of Dreams Manila is designed to cater to the premium end of the market in Manila and leverages the Crown Towers brand and service standards. Hyatt City of Dreams Manila is a modern and international full service hotel and leverages Hyatt s international experience and knowledge of the operation of full service hotels throughout the world. The Nobu Hotel offers a fusion of laidback luxury and exclusive guestroom and spa services. City of Dreams Manila delivers a distinct entertainment and hospitality experience to the Philippines and will ultimately play a key role in strengthening the depth and diversity of Manila s leisure, business and tourism offerings, enhancing its growing position as one of Asia s premier leisure destinations. It has been developed to specifically meet the needs of the large, rapidly growing and increasingly diverse audience of leisure and entertainment seekers both in the Philippines and those visiting Manila from across the Asia region and around the world. Subsidiaries of MCP As of March 31, 2017 and December 31, 2016, MCP s wholly-owned subsidiaries comprise the MCE Holdings Group. MCE Holdings, MCE Holdings No. 2 and MCE Leisure were all incorporated in the Philippines and were registered with the SEC. The primary purposes of MCE Holdings and MCE Holdings No. 2 are investment holding and the primary purpose of MCE Leisure is to develop and operate tourist facilities, including hotel casino entertainment complexes with hotel, retail and amusement areas and themed development components and to engage in casino gaming activities. Activities of MCE Holdings Group On July 5, 2012, Melco, through its indirect subsidiary, entered into a memorandum of agreement (the MOA ) with SMIC and certain of its subsidiaries (the SM Group ), Belle and PLAI for the development of City of Dreams Manila. Further to the MOA, on October 25, 2012, the MCE Holdings Group entered into a cooperation agreement (the Cooperation Agreement ) and other related arrangements with the SM Group, Belle and PLAI. MCE Leisure also entered into a lease agreement on October 25, 2012 with Belle for the lease of the land and buildings for City of Dreams Manila (the Lease Agreement ). On March 13, 2013, the Cooperation Agreement and the Lease Agreement became effective upon the completion of the closing arrangement conditions, with minor changes to the original terms (except for 1 As of March 31, 2017, Mr. Lawrence Ho holds 52.51% of Melco International and the indirect and ultimate beneficial ownership of the Company. 5

6 certain provisions of the Cooperation Agreement which were effective on signing). In addition, the MCE Holdings Group and the Philippine Parties entered into an operating agreement on March 13, 2013, pursuant to which MCE Leisure has been granted the exclusive right to manage, operate and control City of Dreams Manila (the Operating Agreement ). On December 19, 2013, MCE Leisure priced its 15 billion aggregate principal amount of Senior Notes at par, with a maturity date of January 24, 2019 (the Senior Notes ). The issuance of the Senior Notes was completed on January 24, The net proceeds from the issuance of Senior Notes were used for funding the City of Dreams Manila project, refinancing of debt and general corporate purposes. PAGCOR issued the Regular License dated April 29, 2015 in replacement of the provisional license ( Provisional License ) to the Licensees for the operation of City of Dreams Manila. The Regular License has the same terms and conditions as the Provisional License and is valid until July 11, Key Performance Indicators (KPIs) We use the following KPIs to evaluate our casino operations, including table games and gaming machines: a. Adjusted EBITDA: Earnings before interest, taxes, depreciation, amortization, payments to the Philippine Parties, land rent to Belle, share-based compensation expenses, corporate expenses and other non-operating income and expenses. b. Revenue Growth: Measures the percentage change in revenue over a period of time. It is regularly monitored on a per product and per client basis. c. Net Income: Measures the profitability of the Group. d. Basic Earnings Per Share: Measures how much a stockholder earns in the Net Income of the Group. Basic Earnings per share is calculated by dividing Net Income by the weighted number of common shares issued and outstanding during a particular period of time. e. Rolling Chip Volume: the amount of non-negotiable chips wagered and lost by the rolling chip market segment. f. Rolling Chip Win Rate: rolling chip table games win (calculated before discounts and commissions) as a percentage of rolling chip volume. g. Mass Market Table Games Drop: the amount of table games drop in the mass market table games segment. h. Mass Market Table Games Hold Percentage: mass market table games win as a percentage of mass market table games drop. i. Table Games Win: the amount of wagers won net of wagers lost on gaming tables that is retained and recorded as casino revenues. j. Gaming Machine Handle: the total amount wagered in gaming machines. k. Gaming Machine Win Rate: gaming machine win expressed as a percentage of gaming machine handle. l. Average Daily Rate: calculated by dividing total room revenues including the retail value of promotional allowances (less service charges, if any) by total rooms occupied, including complimentary rooms, i.e., average price of occupied rooms per day. m. Occupancy Rate: the average percentage of available hotel rooms occupied, including complimentary rooms, during a period. 6

7 n. Revenue Per Available Room or REVPAR: calculated by dividing total room revenues including the retail value of promotional allowances (less service charges, if any) by total rooms available, thereby representing a combination of hotel average daily room rates and occupancy. Operating Results for the Three Months Ended March 31, 2017 Compared to the Three Months Ended March 31, 2016 (in thousands of Philippine peso, except per share and % change data) VERTICAL ANALYSIS HORIZONTAL ANALYSIS For the three For the three months ended months ended March 31, March 31, % to Revenues % of Change in Prior Period Inc / (Dec) % Net operating revenues Casino 7,299,172 4,051,809 93% 89% 3,247,363 80% Rooms 264, ,334 3% 5% 37,790 17% Food and beverage 175, ,596 2% 4% 9,636 6% Entertainment, retail and others 141,884 91,010 2% 2% 50,874 56% Total net operating revenues 7,880,412 4,534, % 100% 3,345,663 74% Operating costs and expenses Gaming tax and license fees (1,857,641) (1,132,471) -24% -25% (725,170) 64% Inventories consumed (216,771) (191,074) -3% -4% (25,697) 13% Employee benefit expenses (844,352) (868,504) -11% -19% 24,152-3% Depreciation and amortization (1,086,682) (1,153,893) -14% -25% 67,211-6% Other expenses (2,249,388) (1,218,579) -29% -27% (1,030,809) 85% Payments to the Philippine Parties (773,855) (337,904) -10% -7% (435,951) 129% Total operating costs and expenses (7,028,689) (4,902,425) -89% -108% (2,126,264) 43% Operating profit (loss) 851,723 (367,676) 11% -8% 1,219, % Non-operating income (expenses) Interest income 5,806 2,822 0% 0% 2, % Interest expenses, net of capitalized interest (726,554) (713,215) -9% -16% (13,339) 2% Amortization of deferred financing costs (17,235) (16,109) 0% 0% (1,126) 7% Other finance fees (11,958) (11,958) 0% 0% - 0% Foreign exchange gains (losses), net 65,652 (28,630) 1% -1% 94, % Total non-operating expenses, net (684,289) (767,090) -9% -17% 82,801-11% Profit (Loss) before income tax 167,434 (1,134,766) 2% -25% 1,302, % Income tax expense (18,858) (1,050) 0% 0% (17,808) 1696% Net profit (loss) 148,576 (1,135,816) 2% -25% 1,284, % Other comprehensive income - - 0% 0% - N/A Total comprehensive income (loss) 148,576 (1,135,816) 2% -25% 1,284, % Basic/diluted earnings (loss) per share 0.03 ( 0.20) 0% 0% % Net profit for the three months ended March 31, 2017 was million, compared to a net loss of 1,135.8 million for the three months ended March 31, 2016, which is primarily related to improved operating revenues generated during the current period, lower employee benefit expenses, lower depreciation and amortization and net foreign exchange gains for the period, partially offset by associated increases in operating costs, payments to the Philippine Parties as well as interest expenses (net of capitalized interest). Revenues Total net operating revenues were 7,880.4 million for the three months ended March 31, 2017, representing an increase of 3,345.7 million, from 4,534.7 million for the three months ended March 31, The increase in total net operating revenues was primarily driven by the improved casino revenues as discussed below. 7

8 Total net operating revenues for the three months ended March 31, 2017 was comprised of 7,299.2 million of casino revenues, representing 93% of total net operating revenues, and million of non-casino revenues. Total net operating revenues for the three months ended March 31, 2016 was comprised of 4,051.8 million of casino revenues, representing 89% of the total net operating revenues, and million of non-casino revenues. Casino - Casino revenues for the three months ended March 31, 2017 were 7,299.2 million, an increase of 3,247.4 million, or 80%, from 4,051.8 million for the three months ended March 31, Rolling chip volume for the three months ended March 31, 2017 was billion, as compared to 70.9 billion for the three months ended March 31, Rolling chip win rate (calculated before discounts and commissions) was 3.4%, and improved from 2.8% for the three months ended March 31, In the mass market table games segment, mass market table games drop was 7.7 billion for the three months ended March 31, 2017 which represented an increase of 2.0 billion from 5.7 billion for the three months ended March 31, The mass market table games hold percentage was 28.7% for the three months ended March 31, 2017 and demonstrated an increase from 27.5% for the three months ended March 31, Gaming machine handle for the three months ended March 31, 2017 was 36.6 billion, compared with 21.3 billion for the three months ended March 31, The gaming machine win rate was 6.2% for the three months ended March 31, 2017 versus 6.1% for the three months ended March 31, The average number of table games and average number of gaming machines for the three months ended March 31, 2017 were 270 and 1,773, respectively, as compared to 277 and 1,656, respectively, for the three months ended March 31, Average net win per table game per day and average net win per gaming machine per day for the three months ended March 31, 2017 were 260,107 and 14,258, respectively, as compared to 139,566 and 8,627, respectively, for the three months ended March 31, Rooms - Room revenues come from Crown Towers hotel, Nobu Hotel and Hyatt City of Dreams Manila and amounted to million for the three months ended March 31, 2017 representing an increase of 37.8 million, or 17%, from million for the three months ended March 31, 2016, primarily due to improved occupancy as compared to the three months ended March 31, City of Dreams Manila s average daily rate, occupancy rate and REVPAR for the three months ended March 31, 2017 were 7,705, 97.7% and 7,528, respectively, as compared to 7,400, 85.7% and 6,342, respectively, for the three months ended March 31, Food, beverage and others - Other non-casino revenues for the three months ended March 31, 2017 included food and beverage revenues of million and entertainment, retail and other revenues of million. Other non-casino revenues for the three months ended March 31, 2016 included food and beverage revenues of million and entertainment, retail and other revenues of 91.0 million. The increase was primarily attributable from higher food and beverage sales, more tickets sales from our DreamPlay as well as higher rental income from our malls and office premises. Operating costs and expenses Total operating costs and expenses were 7,028.7 million for the three months ended March 31, 2017, representing an increase of 2,126.3 million from 4,902.4 million for the three months ended March 31, The increase in operating costs was generally in line with the increased net operating revenues in the current period. Gaming tax and license fees for the three months ended March 31, 2017 amounted to 1,857.6 million, representing an increase of million, or 64%, from 1,132.5 million for the three months ended March 31, The increase is in line with the increased casino revenues. Inventories consumed for the three months ended March 31, 2017 and 2016 amounted to million and million, respectively. The increase was attributable to more playing cards and dice and food and beverage items consumed during the period. Employee benefit expenses for the three months ended March 31, 2017 amounted to million, as compared to million for the three months ended March 31, The decrease was mainly due to the cancellation of share-based awards during the period as well as full vesting of share options/restricted shares granted in previous years. 8

9 Depreciation and amortization for the three months ended March 31, 2017 and 2016 amounted to 1,086.7 million and 1,153.9 million, respectively. The decrease was primarily due to the disposals of property and equipment in mid Other expenses for the three months ended March 31, 2017 amounted to 2,249.4 million, as compared to 1,218.6 million for the three months ended March 31, The increase was primarily attributable to million of higher other gaming operations expenses as a result of higher casino revenues. Refer to Note 10 to the unaudited condensed consolidated financial statements for the nature and details. Payments to the Philippine Parties represented the agreed-upon payments to PLAI calculated in accordance with the Operating Agreement and related supplementary agreements. The increase was primarily due to improved casino revenues during the period. Non-operating expenses, net Interest income was 5.8 million for the three months ended March 31, 2017 as compared to 2.8 million for the three months ended March 31, The increase was due to higher level deposits being placed at a bank during the three months ended March 31, 2017 compared to the same period in Interest expenses (net of capitalized interest) were mainly represented by interest expenses on Senior Notes and obligations under a finance lease in relation to the Lease Agreement, amounted to million for the three months ended March 31, 2017 as compared to million for the three months ended March 31, The increase was primarily due to a higher effective interest on obligations under a finance lease during the period. Amortization of deferred financing costs remained stable at 17.2 million and 16.1 million for the three months ended March 31, 2017 and 2016, respectively, representing amortization of deferred financing costs for the Senior Notes. Other finance fees amounted to 12.0 million for the three months ended March 31, 2017 and 2016, representing the gross receipt taxes in relation to interest payments on the Senior Notes issued in January The net foreign exchange gains of 65.7 million for the three months ended March 31, 2017 were mainly due to the translation of foreign currency denominated bank balances and payables at the period end closing rate. Because the Philippine peso declined against the H.K. dollar and the U.S. dollar during the three months ended March 31, 2017, a net foreign exchange gains resulted in the current period as compared to a net foreign exchange losses of 28.6 million for the three months ended March 31, Income tax expense The income tax expense for the three months ended March 31, 2017 primarily represents the deferred tax liability arising from net unrealized foreign exchange gains. Net profit (loss) As a result of the foregoing, the Group incurred a net profit of million for the three months ended March 31, 2017, as compared to a net loss of 1,135.8 million for the three months ended March 31, Adjusted EBITDA Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, payments to the Philippine Parties, land rent to Belle, share-based compensation expenses, corporate expenses and other nonoperating income and expenses. Adjusted EBITDAs were 3,046.2 million and 1,311.4 million for the three months ended March 31, 2017 and 2016, respectively. Our management uses Adjusted EBITDA to measure the operating performance of City of Dreams Manila, and to compare the operating performance of our property with those of our competitors. Adjusted EBITDA is 9

10 also presented as a supplemental disclosure because management believes it is widely used to measure performance and as a basis for valuation of gaming companies. Our management also uses Adjusted EBITDA because it is used by some investors as a way to measure a company s ability to incur and service debt, make capital expenditures and meet working capital requirements. Gaming companies have historically reported similar measures as a supplement to financial measures in accordance with generally accepted accounting principles. However, Adjusted EBITDA should not be considered in isolation, construed as an alternative to profit or operating profit, treated as an indicator of our PFRS operating performance, other operating operations or cash flow data, or interpreted as an alternative to cash flow as a measure of liquidity. Adjusted EBITDA presented in this quarterly report may not be comparable to other similarly titled measures of other companies operating in the gaming or other business sectors. While our management believes these figures may provide useful additional information to investors when considered in conjunction with our financial statements and other information in this quarterly report, less reliance should be placed on Adjusted EBITDA as a measure in assessing our overall financial performance. Trends, Events or Uncertainties Affecting Recurring Revenues and Profits The Group is exposed to a number of trends, events and uncertainties, which can affect its recurring revenues and profits. These include levels of general economic activity, political stability, market competition, possibilities of any natural disasters, legal and license terms compliance, tax rates, as well as certain cost items, such as operating costs, labor, fuel and power. The Group collects revenues and pay expenses in various currencies and the appreciation and depreciation of other major currencies against the Philippine peso may have a negative impact on the Group s reported levels of revenues and profits. 10

11 Financial Condition and Balance Sheet The consolidated balance sheet of the Group as of March 31, 2017 with variances against December 31, 2016 is discussed, as set out below. (in thousands of Philippine peso, except per share and % change data) VERTICAL ANALYSIS HORIZONTAL ANALYSIS % of Change from Prior March 31, December 31, % to Total Assets Period ASSETS Inc / (Dec) % Current assets Cash and cash equivalents 9,892,211 10,351,414 24% 25% (459,203) -4% Bank deposits with original maturities over three months 1,003,880-2% 0% 1,003,880 N/A Restricted cash 309, ,025 1% 1% 69,690 29% Accounts receivable, net 1,623,566 1,391,213 4% 3% 232,353 17% Inventories 214, ,411 1% 1% (16,282) -7% Prepayments and other current assets 367, ,692 1% 1% 44,801 14% Amount due from a shareholder 5,590 5,590 0% 0% - 0% Amount due from an intermediate holding company 135, ,264 0% 0% (3,726) -3% Amount due from immediate holding company 3,000 3,000 0% 0% - 0% Amount due from an affiliated company 1,385 1,117 0% 0% % Total current assets 13,556,507 12,684,726 32% 30% 871,781 7% Non-current assets Property and equipment, net 25,957,024 26,866,578 62% 64% (909,554) -3% Contract acquisition costs, net 850, ,872 2% 2% (13,023) -2% Other intangible assets, net 4,077 5,436 0% 0% (1,359) -25% Other non-current assets 1,360,226 1,270,048 3% 3% 90,178 7% Total non-current assets 28,172,176 29,005,934 68% 70% (833,758) -3% Total assets 41,728,683 41,690, % 100% 38,023 0% LIABILITIES AND EQUITY Current liabilities Accounts payable 105, ,270 0% 0% (33,590) -24% Accrued expenses, other payables and other current liabilities 6,025,030 5,414,657 14% 13% 610,373 11% Current portion of obligations under a finance lease 1,558,219 1,524,893 4% 4% 33,326 2% Amounts due to affiliated companies 479,226 1,282,040 1% 3% (802,814) -63% Income tax payable % 0% (160) -100% Total current liabilities 8,168,155 8,361,020 20% 20% (192,865) -2% Non-current liabilities Long-term debt, net 14,865,735 14,848,500 36% 36% 17,235 0% Non-current portion of obligations under a finance lease 13,106,771 13,061,462 31% 31% 45,309 0% Deferred rent liabilities 227, ,258 1% 1% 7,764 4% Retirement liabilities 46,819 41,644 0% 0% 5,175 12% Other non-current liabilities 37,820 43,485 0% 0% (5,665) -13% Deferred tax liability, net 100,206 81,188 0% 0% 19,018 23% Total non-current liabilities 28,384,373 28,295,537 68% 68% 88,836 0% Equity Capital stock 5,662,897 5,662,897 14% 14% - 0% Additional paid-in capital 22,076,822 22,076,822 53% 53% - 0% Share-based compensation reserve 396, ,835 1% 1% (20,278) -5% Equity reserve (3,613,990) (3,613,990) -9% -9% - 0% Accumulated deficit (19,346,131) (19,508,461) -46% -47% 162,330-1% Total equity 5,176,155 5,034,103 12% 12% 142,052 3% Total equity and liabilities 41,728,683 41,690, % 100% 38,023 0% Current assets Cash and cash equivalents decreased by million, which is primarily the net result of operating cash inflows, placement of bank deposits with original maturities over three months and payments made for capital expenditures. Refer below to Liquidity and Capital Sources for cash flow analysis for the three months ended March 31, Bank deposits with original maturities over three months of 1,003.9 million were placed with a bank as of March 31, 2017 to gain interest income. Restricted cash represents an escrow account that is restricted for foundation fees payable in accordance with the terms of the Regular License. The increase during the period represented the foundation s contributed amount received for the current period. 11

12 Accounts receivable, net, primarily attributable to casino, hotel and other receivables, and which increased by million, primarily came from increased casino receivables, in line with the increased casino revenues. Refer to Note 5 to the unaudited condensed consolidated financial statements for the details of the accounts receivable as of March 31, Inventories of million mainly consisted of gaming inventories, retail merchandise, food and beverage items and certain operating supplies. No material fluctuations were noted. Prepayments and other current assets increased by 44.8 million, primarily due to increases in (i) prepaid operating expenses and receivables of 90.7 million mainly pertaining to prepaid annual insurance premiums and related fees during the quarter; and (ii) deposits for acquisitions of inventory of 15.8 million; partially offset by decreases in insurance claims received during the quarter of 66.3 million. Non-current assets Property and equipment, net, decreased by million, mainly due to depreciation of 1,072.3 million on the operating equipment during the period. Contract acquisition costs, net, decreased by 13.0 million, solely due to amortization charges for the three months ended March 31, Other intangible assets, net, decreased by 1.4 million during the period as a result of amortization on the straight-line basis over the license term of 5 years. Other non-current assets increased by 90.2 million primarily due to (i) further recognition of net input VAT, net of 43.0 million during the three months ended March 31, 2017 and (ii) increases in advance payments and deposits for acquisitions of property and equipment of 49.3 million. Current liabilities Accounts payable of million represented the payables to suppliers for products and services such as playing cards and marketing. The decrease in the balance was due to settlements made to suppliers during the quarter. Accrued expenses, other payables and other current liabilities increased by million, mainly related to increases in (i) outstanding gaming chips and tokens of million as a result of rolling from revenue share junkets in late March 2017; (ii) accruals for gaming tax and license fees of million as a result of increased casino revenues; (iii) accruals for acquisition of property and equipment of million; (iv) customer deposits of million as a result of a new junket starting operations in late March 2017; (v) accruals for payments to the Philippine Parties of 96.9 million as a result of increased casino revenues; all of which were partially offset by the decrease in (vi) interest expenses payable of million as a result of semi-annual interest payments made during the quarter. Refer to Note 7 to the unaudited condensed consolidated financial statements for the nature and details of these items. Current portion of obligations under a finance lease represented building lease payments due within one year. The increase during the period was due to finance lease charges of million recognized during the period, partially offset by lease payments made of million during the period. Amounts due to affiliated companies decreased by million primarily as a result of settlement of balances outstanding as of December 31, 2016, partially offset by management fees and trademark license fees recharged from affiliate companies during the quarter. Refer to Note 11 to the unaudited condensed consolidated financial statements for the nature and details of related party transactions for the three months ended March 31, Non-current liabilities Long-term debt, net, of 14.9 billion represents the Senior Notes which will mature in 2019 and were priced at par of 100% of the principal amount of 15.0 billion (net of million in unamortized deferred 12

13 financing costs). The increase during the period solely represented the amortization of deferred financing costs of 17.2 million for the period. The non-current portion of obligations under a finance lease increase of 45.3 million solely represented finance lease charges during the period. Deferred rent liabilities, net, increased by 7.8 million primarily due to effective rent recognized during the period. Retirement liabilities increased by 5.2 million primarily due to such service costs recognized during the period. Other non-current liabilities represented retail tenant deposits and other payables which are due beyond one year. The decrease was primarily due to a portion of retail tenant deposits being reclassified as current as of March 31, Deferred tax liability, net, mainly represented the deferred tax charges on net unrealized foreign exchange gains. Equity Capital stock and additional paid-in capital remained unchanged as of March 31, 2017 and December 31, The share-based compensation reserve decreased by 20.3 million mainly due to the reversal of sharebased payments expenses of 6.5 million during the three months ended March 31, 2017 and the transfer of 13.8 million to the accumulated deficit as a result of the expiry of certain share options during the period. The equity reserve consisted of the net difference between the cost of MCP to acquire MCE Holdings Group and the legal capital of the latter at the date of reverse acquisition, plus the retained earnings of MCP as of December 19, 2012, the date when MCP was acquired by Melco. The amount remained unchanged as of March 31, 2017 as compared to December 31, The deficit decreased by million to 19,346.1 million as of March 31, 2017, from 19,508.5 million as of December 31, 2016, which was primarily due to the net profit of million recognized during the three months ended March 31, 2017 and the transfer of 13.8 million from the share-based compensation reserve as mentioned above. Liquidity and Capital Sources The table below shows the Group s unaudited condensed consolidated cash flows for the three months ended March 31, 2017 and For the Three Months Ended March 31, 2017 For the Three Months Ended March 31, 2016 % Change In thousands of Philippine peso, except % change data Net cash provided by operating activities 1,596,985 1,728,008-8% Net cash used in investing activities (1,195,679) (1,084,111) 10% Cash used in financing activities (908,645) (493,706) 84% Effect of foreign exchange on cash and cash equivalents 48,136 (49,740) -197% Net (decrease) increase in cash and cash equivalents (459,203) 100, % Cash and cash equivalents at beginning of period 10,351,414 7,460,229 39% Cash and cash equivalents at end of period 9,892,211 7,560,680 31%

14 Cash and cash equivalents decreased by 4% as of March 31, 2017 compared to December 31, 2016 mainly due to the net effect of the following: - For the three months ended March 31, 2017, the Group recorded cash flow from operating activities of 1,597.0 million primarily attributable to the operating performance at City of Dreams Manila as discussed in the aforesaid sections. - Net cash used in investing activities amounted to 1,195.7 million for the three months ended March 31, 2017, which primarily includes: (i) placement of bank deposits with original maturities over three months of 1,003.9 million; (ii) capital expenditure payments of 62.0 million; (iii) deposits for acquisitions of property and equipment of 63.0 million; and (iv) an increase in restricted cash of 69.7 million for the foundation fees payable. - Cash used in financing activities for the three months ended March 31, 2017 solely represented interest and other finance fee payments for the Senior Notes of million and repayments of obligations under a finance lease of million. The table below shows the Group s capital sources as of March 31, 2017 and December 31, As of March 31, 2017 As of December 31, 2016 % Change In thousands of Philippine peso, except % change data Long-term debt, net 14,865,735 14,848,500 0 % Equity 5,176,155 5,034,103 3% 20,041,890 19,882,603 1% Total long-term debt, net, and equity increased by 1% to 20,041.9 million as of March 31, 2017, from 19,882.6 million as of December 31, The increase was mainly due to the net profit of million during the three months ended March 31, Risks Related to Financial Instruments The Group has financial assets and financial liabilities such as cash and cash equivalents, bank deposits with original maturities over three months, restricted cash, accounts receivable, deposits and receivables, security deposit, amount due from a shareholder, amount due from an intermediate holding company, amount due from immediate holding company, amounts due from/to affiliated companies, accounts payable and accrued expenses, other payables and other current liabilities, current and non-current portion of obligations under a finance lease and long-term debt, which arise directly from its operations. The main risks arising from the Group s financial instruments as of and for the three months ended March 31, 2017 are interest rate risk, credit risk, liquidity risk and foreign exchange risk. Management reviews and approves policies for managing each of these risks. Other Financing and Liquidity Matters We may obtain financing in the form of, among other things, equity or debt, including additional bank loans or high yield, mezzanine or other debts, or rely on our operating cash flows to fund the operation of City of Dreams Manila. We are a growing company with significant financial needs. We expect to have additional capital expenditures in the future as we continue to develop City of Dreams Manila. We have relied and intend in the future to rely on our operating cash flows and different forms of financing to meet our funding needs and repay our indebtedness, as the case may be. The timing of any future debt and equity financing activities will be dependent on our funding needs, the availability of funds on acceptable terms to us, and prevailing market conditions. We may carry out activities 14

15 from time to time to strengthen our financial position and ability to better fund our business expansion. Such activities may include refinancing existing debt, monetizing assets, issuance of stock, sale and lease-back transactions or other similar activities. Any other future developments may be subject to further financing and a number of other factors, many of which are beyond our control. As of March 31, 2017, we had capital commitments contracted for, but not provided, mainly for the acquisitions of property and equipment of City of Dreams Manila totaling million. There were no material off-balance sheet transactions, arrangements, obligations or other relationships of the Group with unconsolidated entities or other persons that the Group is aware of during the reporting period. Other Financial Information Aging of Accounts Receivable The aging analysis of accounts receivable of the Group, presented based on payment due date is as follows: In thousands of Philippine peso As of March 31, 2017 Current 1,594,714 Past 1-30 due: days 1 30 days 10, days days 655 Over 90 days 36,126 Total 1,642,856 15

16 PART II - OTHER INFORMATION There is no other information which has not been previously reported in SEC Form 17-C that needs to be reported in this section. 16

17 SIGNATURES Pursuant to the requirements of the Securities Regulation Code, the issuer has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MELCO CROWN (PHILIPPINES) RESORTS CORPORATION r Clarence Yuk an Chung Presiden

18 SIGNATURES Pursuant to the requirements of the Securities Regulation Code, the issuer has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MELCO CROWN (PHILIPPINES) RESORTS CORPORATION (Issuer) Donald Nori Tateishi Treasurer

19 Melco Crown (Philippines) Resorts Corporation and Subsidiaries Condensed Consolidated Financial Statements As at March 31, 2017 (Unaudited) and December 31, 2016 and for the Three Months Ended March 31, 2017 and 2016 (Unaudited)

20 MELCO CROWN (PHILIPPINES) RESORTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 31, 2017 AND DECEMBER 31, 2016 ASSETS March 31, December 31, Notes 2017 (Unaudited) 2016 (Audited) Current Assets Cash and cash equivalents 4 P=9,892,211 P=10,351,414 Bank deposits with original maturities over three months 1,003,880 Restricted cash 309, ,025 Accounts receivable, net 5 1,623,566 1,391,213 Inventories 214, ,411 Prepayments and other current assets 367, ,692 Amount due from a shareholder 11 5,590 5,590 Amount due from an intermediate holding company , ,264 Amount due from immediate holding company 11 3,000 3,000 Amount due from an affiliated company 11 1,385 1,117 Total Current Assets 13,556,507 12,684,726 Non-current Assets Property and equipment, net 6 25,957,024 26,866,578 Contract acquisition costs, net 850, ,872 Other intangible assets, net 4,077 5,436 Other non-current assets 1,360,226 1,270,048 Total Non-current Assets 28,172,176 29,005,934 LIABILITIES AND EQUITY P=41,728,683 P=41,690,660 Current Liabilities Accounts payable P=105,680 P=139,270 Accrued expenses, other payables and other current liabilities 7 6,025,030 5,414,657 Current portion of obligations under a finance lease 14 1,558,219 1,524,893 Amounts due to affiliated companies ,226 1,282,040 Income tax payable 160 Total Current Liabilities 8,168,155 8,361,020 Non-current Liabilities Long-term debt, net 15 14,865,735 14,848,500 Non-current portion of obligations under a finance lease 14 13,106,771 13,061,462 Deferred rent liabilities 227, ,258 Retirement liabilities 46,819 41,644 Other non-current liabilities 37,820 43,485 Deferred tax liability, net 100,206 81,188 Total Non-current Liabilities P=28,384,373 P=28,295,537

21 MELCO CROWN (PHILIPPINES) RESORTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS continued MARCH 31, 2017 AND DECEMBER 31, 2016 March 31, December 31, Notes (Unaudited) (Audited) Equity Capital stock 8 P=5,662,897 P=5,662,897 Additional paid-in capital 22,076,822 22,076,822 Share-based compensation reserve 396, ,835 Equity reserve (3,613,990) (3,613,990) Accumulated deficit (19,346,131) (19,508,461) Total Equity 5,176,155 5,034,103 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements. P=41,728,683 P=41,690,660

22 MELCO CROWN (PHILIPPINES) RESORTS CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016 Three Months Ended March 31, Notes NET OPERATING REVENUES Casino P=7,299,172 P=4,051,809 Rooms 264, ,334 Food and beverage 175, ,596 Entertainment, retail and others 141,884 91,010 Total Net Operating Revenues 7,880,412 4,534,749 OPERATING COSTS AND EXPENSES Gaming tax and license fees (1,857,641) (1,132,471) Inventories consumed (216,771) (191,074) Employee benefit expenses 9 (844,352) (868,504) Depreciation and amortization (1,086,682) (1,153,893) Other expenses 10 (2,249,388) (1,218,579) Payments to the Philippine Parties (773,855) (337,904) Total Operating Costs and Expenses (7,028,689) (4,902,425) OPERATING PROFIT (LOSS) 851,723 (367,676) NON-OPERATING INCOME (EXPENSES) Interest income 5,806 2,822 Interest expenses, net of capitalized interest (726,554) (713,215) Amortization of deferred financing costs (17,235) (16,109) Other finance fees (11,958) (11,958) Foreign exchange gains (losses), net 65,652 (28,630) Total Non-operating Expenses, Net (684,289) (767,090) PROFIT (LOSS) BEFORE INCOME TAX 167,434 (1,134,766) INCOME TAX EXPENSE 13 (18,858) (1,050) NET PROFIT (LOSS) 148,576 (1,135,816) OTHER COMPREHENSIVE INCOME TOTAL COMPREHENSIVE INCOME (LOSS) P=148,576 (P=1,135,816) Basic/Diluted Earnings (Loss) Per Share 12 P=0.03 (P=0.20) See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

23 MELCO CROWN (PHILIPPINES) RESORTS CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016 Additional Share-based Capital Stock Paid-in Compensation Equity Accumulated (Note 8) Capital Reserve Reserve Deficit Total Balance as of January 1, 2017 P=5,662,897 P=22,076,822 P=416,835 (P=3,613,990) (P=19,508,461) P=5,034,103 Net profit 148, ,576 Total comprehensive income 148, ,576 Share-based compensation (6,524) (6,524) Transfer of share-based compensation reserve upon expiry of share options (13,754) 13,754 Balance as of March 31, 2017 P=5,662,897 P=22,076,822 P=396,557 (P=3,613,990) (P=19,346,131) P=5,176,155 Balance as of January 1, 2016 P=5,643,355 P=21,932,963 P=606,279 (P=3,613,990) (P=17,960,537) P=6,608,070 Net loss (1,135,816) (1,135,816) Total comprehensive loss (1,135,816) (1,135,816) Share-based compensation 34,241 34,241 Transfer of share-based compensation reserve upon expiry of share options (3,150) 3,150 Balance as of March 31, 2016 P=5,643,355 P=21,932,963 P=637,370 (P=3,613,990) (P=19,093,203) P=5,506,495 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

24 MELCO CROWN (PHILIPPINES) RESORTS CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016 Three Months Ended March 31, CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by operating activities P=1,596,985 P=1,728,008 CASH FLOWS FROM INVESTING ACTIVITIES Placement of bank deposits with original maturities over three months (1,003,880) Increase in restricted cash (69,690) (43,807) Deposits for acquisitions of property and equipment (63,040) (36,397) Payments for acquisitions of property and equipment (62,014) (1,003,907) Proceeds from disposals of property and equipment 2,945 Net cash used in investing activities (1,195,679) (1,084,111) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of obligations under a finance lease (415,979) Interest paid (468,750) (468,750) Other finance fees paid (23,916) (23,916) Payments for issuance of capital stock (1,040) Cash used in financing activities (908,645) (493,706) EFFECT OF FOREIGN EXCHANGE ON CASH AND CASH EQUIVALENTS 48,136 (49,740) NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (459,203) 100,451 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 10,351,414 7,460,229 CASH AND CASH EQUIVALENTS AT END OF PERIOD P=9,892,211 P=7,560,680 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

25 MELCO CROWN (PHILIPPINES) RESORTS CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Organization and Business Corporate Information Melco Crown (Philippines) Resorts Corporation (herein referred to as MCP or the Parent Company ) is incorporated in the Philippines and registered with the Philippine Securities and Exchange Commission (the SEC ). The shares of stock of the Parent Company are publicly traded on The Philippine Stock Exchange, Inc. (the PSE ). On February 1, 2017 and April 7, 2017, the Board of Directors and stockholders of MCP, respectively, approved the change of the Parent Company s name to Melco Resorts and Entertainment (Philippines) Corporation, subject to the SEC s approval. The Parent Company together with its subsidiaries (collectively referred to as the Group ) is a developer, owner and operator of casino gaming and entertainment resort facilities in the Philippines. The Group currently operates and manages City of Dreams Manila, a casino, hotel, retail and entertainment integrated resort in the Entertainment City complex in Manila. The Parent Company s principal place of business is the Philippines and its registered office address is Asean Avenue cor. Roxas Boulevard, Brgy. Tambo, Parañaque City As of March 31, 2017 and December 31, 2016, the Parent Company s ultimate holding company is Melco International Development Limited ( Melco International ), a Hong Kong-listed company. As of March 31, 2017 and December 31, 2016, the immediate holding company of the Parent Company is MCE (Philippines) Investments Limited ( MCE Investments ), an indirect subsidiary of Melco International. 2. Summary of Significant Accounting Policies Basis of Preparation The unaudited condensed consolidated financial statements have been prepared under the historical cost basis. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The unaudited condensed consolidated financial statements are presented in Philippine peso, the functional and presentation currency of the Parent Company and its subsidiaries. All values are rounded off to the nearest thousand, unless otherwise indicated. Statement of Compliance The Group s unaudited condensed consolidated financial statements have been prepared in conformity with Philippine Accounting Standards ( PAS ) 34, Interim Financial Reporting. The Group s unaudited condensed consolidated financial statements as of March 31, 2017 do not include all the information and disclosures required in the annual consolidated financial statements and the results of operations are not necessarily indicative of the results for full year, and should be read in conjunction with the Group s audited consolidated financial statements as of December 31, In preparing the Group s unaudited condensed consolidated financial statements as of March 31, 2017, the significant judgments made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Group s audited consolidated financial statements as of December 31, 2016.